got 18.02

1.5 billion from Aurora sale...

http://www.marketwatch.com/story/lehman-brothers-holdings-announces-completion-of-the-sale-of-substantially-all-aurora-bank-assets-and-insured-deposits-2012-06-29


http://www.ft.com/intl/cms/s/0/624152e2-c15a-11e1-8eca-00144feabdc0.html#axzz1zHiT6l9a

H Man ,, Got another EOS up your sleeve?? .-)

According to DTC a dividend in the amount of $0.584735 is also payable today. Record date of 3/28.

I've been in (and out of) Capital Crossing/EOS for the last four years, but found your board a year or two ago. Some very informative posts, and some smart people here! Anyway, the $25.00 hit my account today, and I'm assuming the final dividend will hit around the 15th, but that's just a guess. Congrats to all that listened!

Negative. The liquidating distribution will include it. I suspect there will be a record date.

The PR says information will be mailed to shareholders.

H-Man Way to Go !!!!!

So.. If we sell today,, will we get the divi back to Jan 1 ???Thanks in Advance??

Yee-haw!

This part sounds good:

In connection with the Corporation's anticipated liquidation, the Board approved the voluntarily delisting of the Corporation's 8.50% Non-Cumulative Exchangeable Preferred Stock, Series D ("Series D Preferred Stock) from The NASDAQ Stock Market. The Corporation intends to declare one or more liquidating distributions in cash to the holders of shares of Series D Preferred Stock representing the full liquidation preference on the Series D Preferred Stock of $25.00 per share, plus any accrued but unpaid dividends thereon from January 1, 2012, the beginning of the dividend period in which the liquidation occurs, to the date of liquidation. The delisting of the Series D Preferred Stock is expected to occur concurrently with payment of the liquidating distribution to the holders of shares of Series D Preferred Stock.

Now for the bad;

Do we know if it will be the full amount?

Liquidating preferred announced:

http://biz.yahoo.com/e/120315/eospn8-k.html

Too bad Lehman can't get the $210mm until they've paid 6 consecutive dividends or they redeem the preferreds based on the dividend restriction agreement.

Nationstar Mortgage Announces Definitive Agreement to Acquire Servicing Assets of Aurora Bank

March 6, 2012, 7:00 a.m. EST


http://www.marketwatch.com/story/nationstar-mortgage-announces-definitive-agreement-to-acquire-servicing-assets-of-aurora-bank-2012-03-06


My quess is that the Preferred continues?

Thanks for posting the American Banker article..

Thanks. Focused on the article, bypasssing the date.

That article was writen on May 11 2009.

I am confused after reading this one:

http://www.propublica.org/article/lehman-mortgage-servicer-on-life-support-gets-a-piece-of-tarp-0511

Done.

Hey, h_man, shoot me an email when you get a chance. Wanted to ask you about EOSPN.

Lortab <AT> gmail <DOT> com

Thanks,

david

Glad the news is "officially" out.

I was notified yesterday.

Looks more like liquidation now.

http://www.americanbanker.com/issues/177_43/aurora-shutter-correspondent-lending-unit-1047174-1.html

Don't know what it means to the value of the Preferreds.

The application may show up on the old OTS application website. There is usually a delay getting it up there. And outside of knowing they they met the requirement to submit a plan, it will provide no more incremental information.

If they did submit a plan on feb.29, would it be a public record?

Negative- May 31 but they need to submit a plan of liquidation to the OCC today if a sale seems unlikely.

Wasn't Feb 29 suppose to be the final day to sell the bank??? Could explain why there was a sell off today..

Not by me.

and that someone is and isn't you both at the same time.

Yes

huh ?

What are you saying ? Is VIC write up by someone driving this ?

Sorry- not by me.

Posting pitching the security on the VIC (Value Investing Club). By by me.

Whats with the volume ?

Some DD from the a Lehman board:

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=71870043



S&P had this to say about the rating of Aurora:


OVERVIEW
We raised our ABS business-based commercial real estate special servicer ranking on Aurora Bank Commercial Services (ABCS) to ABOVE AVERAGE and raised the primary servicing ranking to AVERAGE.The rankings reflect our opinion of the company's knowledgeable and experienced management team, good internal controls, and a proficient special servicing operation.The outlook for both rankings is developing due to a potential sales
transaction for ABCS and Aurora Bank FSB.The company has a long history of servicing and special servicing of first mortgage owner-occupied small balance commercial real estate loans as well a limited volume of larger multitenant properties.


NEW YORK (Standard & Poor's) Feb. 7, 2012--Standard & Poor's Ratings Services today raised its rankings on Aurora Bank Commercial Services (ABCS) as a business-based commercial real estate servicer. We raised our commercial special ranking to ABOVE AVERAGE from AVERAGE and we raised our commercial primary ranking to AVERAGE from BELOW AVERAGE. The outlook for both rankings is developing. The subranking for management and organization is ABOVE AVERAGE, the subranking for loan administration primary servicing is AVERAGE and the subranking for special servicing loan administration is ABOVE AVERAGE.

The raised rankings reflect improvements in the company's quality control and compliance monitoring programs, the company's past two years of compliance with USAP servicing standards, as well as increased staffing within special servicing together with overall organizational structural changes for primary and special servicing.

ABCS is a division of Aurora Bank FSB. The overall organization represents a large banking operation in both the residential and commercial markets.

KEY RANKING FACTORS

Strengths:
An experienced staff and a proactive approach toward asset and portfolio management and special servicing.Well-administered procedures and oversight accomplished by good quality control processes, a separate compliance monitoring area, and sound auditing practices, all of which have improved since our previous review.The ability to handle small and large real estate secured mortgages.Good special servicing results based on increased staffing and improved monitoring of problem assets.Weaknesses:
The non-integration of the current servicing and special servicing technology and a reliance on ancillary applications, which is mitigated by the company's current systems conversion project.Some inconsistencies in format within the procedure manuals for all servicing operations, and the likelihood for required revisions following the conversion project.

ABCS has approximately $2 billion commercial assets under management for approximately 4,000 accounts within its primary and special servicing operations.

I would disagree that the preferred is "hanging in the breeze.". Maybe it was prior to last week but we have a little more clarity. First, they paid a dividend which establishes their intent to pay a dividend. Second, they dropped the "we need OCC approval" language that has been in all filings for the past few years.

Management wants to pay a dividend. The last 2 dividends skipped were because everyone at the OTS was looking for a job in the spring and in the fall because the OCC was being brought up to speed.

Regardless, the dividend is gravy. Within the next 2 months we will have clarity on whether or not this will be liquidated or sold. Either way, this is $25.

I also disagree on your orphan comment. Aurora is a large portion of the Lehman Estate. They NEED to monetize this asset in order to pay creditors. There is a finite timeframe until something happens.

Expect some sort of restructuring in the near future to prepare for what lies ahead.

My question: When will TLSRP actually pay?

I have been following it since 2005.

Par value plus accrued, unpaid dividends at 9/30/11 was $107.7 million or $33.80 per share. Telos total assets were $100.9 million. Liabilities totaled $204 million. The company has been ripe for a change in control transaction (exchange offer) for years. I know Costa Brava Partnership III L.P. and others have worked together to try to affect change.

EOSPN would be much easier to liquidate.

Orphan Risk

Hi, guys --

Got to love the balance sheet & the short term catalyst, but how do you come to terms with the risk of that this non-cumulative preferred is just left hanging in the breeze? See, e.g., TLSRP for an example, and at least TLSRP is cumulative. It might be impossible to hold on to REIT status, but given that the D is ~40% of the assets anyway, why would a buyer care?

Yours,
RP

Today is the last day to buy shares and get the dividend. It goes x-div on Tuesday.

Aurora Bank as standalone still a possibility.

The strategy of building deposits through online banking has gained credibility in recent years, as a growing number of traditional lenders like Discover Financial Services Inc. and American Express Co. have expanded their own Internet efforts.

Customers are becoming increasingly comfortable with Internet-only accounts, and many online banks now offer rates that are little better than their brick-and-mortar competitors.

Internet bank accounts "are a good way to get into the deposits business in a straightforward way," said Michael Poulos, head of the North American financial-services practice at consulting firm Oliver Wyman.

http://online.wsj.com/article/SB10001424052970203479104577124322607239922.html

All one has to do is pay attention to the all those Ally commercials.

Always envisioned one potential ALS acquirer.

This transaction makes it more likely that a liquidation is completed.

I recall in sone docs that the liquidation would be a sale of ALS and the Lehman estate taking possession of the assets of Aurora.

Good find!

How about... GE?

Not today. GE Capital Financial has been looking elsewhere. GECF had been looking for a retail funding source.

MetLife to Sell Depository Business of MetLife Bank to GE Capital Financial

NEW YORK--(BUSINESS WIRE)--MetLife, Inc. (NYSE: MET) announced today that GE Capital Financial Inc. will acquire most of the depository business of MetLife Bank, N.A. Financial terms of the transaction, which is expected to close in the second quarter of 2012, were not disclosed.

Under the definitive agreement signed by GE Capital and MetLife Bank, GE Capital will acquire approximately $7.5 billion in MetLife Bank deposits, including certificates of deposit and money market accounts. Approximately $3 billion in custodial deposits associated with MetLife’s forward mortgage business and certain other deposits are not included in the transaction, but will be transferred out of MetLife Bank over the next six months.

MetLife Bank had $10.7 billion in deposits as of September 30, 2011.

“This transaction with GE Capital ensures that customers of MetLife Bank will continue to be served by a high quality organization that already meets the financing needs of more than 100 million consumers,” said Steven A. Kandarian, president and chief executive officer of MetLife, Inc. “At the same time, this agreement is a significant step toward MetLife’s no longer being a bank holding company.”

The transaction is subject to certain regulatory approvals and other customary closing conditions.

In connection with the transaction, MetLife Bank and GE Capital will enter into a transition services agreement to help ensure a seamless transition of the business.

MetLife Bank began operating in 2001 by offering retail savings products via the Internet.

Deutsche Bank Securities Inc. served as exclusive financial advisor to MetLife while Wachtell, Lipton, Rosen & Katz served as MetLife’s legal advisor.

MetLife, Inc. is a leading global provider of insurance, annuities and employee benefit programs, serving 90 million customers in over 50 countries. Through its subsidiaries and affiliates, MetLife holds leading market positions in the United States, Japan, Latin America, Asia Pacific, Europe and the Middle East. For more information, visit www.metlife.com.

http://www.businesswire.com/news/home/20111227005258/en/MetLife-Sell-Depository-Business-MetLife-Bank-GE

You are correct. The mandate to sell Aurora was part of a settlement between the OTS, the bank and Lehman and it settled a lawsuit between Lehman and Aurora over tax loss carry forwards and mortgage servicing rights (amongst a few other things).

The requirement to sell wasn't necessarily mandated by the OTS but was mandated by Lehman as part of the CMA.

The mandate also states that if by Feb 28th the bank isn't likely to be sold, the bank will submit a liquidating plan.

Having said that with the way things has operated in the past, it wouldn't surprise me if the timeline is deferred- but as long as EOS pays a dividend, I don't really care!

Agreed. The OTS/OCC handcuffed the bank's ability to conduct business that they are losing money each quarter.

How can a bank have $2.5B in cash and a 28% tier 1 capital ratio and be profitable.

I suspect some sort of recap/restructure will occur. If they are going to sell I would think they would distribute cash and securities to Lehman.

EI! Nice to hear from you.

Woodlands is currently being liquidated. In August they transferred/sold ~$550mm in brokered CDs to Metlife. Their balance sheet has been shrinking significantly over the past year.

As for Aurora, what would someone be buying? ALS is currently being shopped by DB and there have been a few transactions in this space (namely Goldman selling Litton). Besides that, there are no bank branches and depositors are brokered CD depositors.

A purchaser would be basically buying a federal bank charter and ~$900mm in whole loans.

Correspondent Lending at Aurora Bank is promoting Jumbos.

https://www.aurorabankfsb.com/business/correspondent

LEHMQ Disclosure Statement for Third Amended Joint Plan does state:

LBHI agreed to take steps as necessary to maintain the Banks’ capital at certain levels and to sell Aurora Bank and to sell or wind-down Woodlands prior to March 2012. If sales cannot be completed by that date, LBHI will within such period complete the dissolution and wind-down of the Banks by purchasing their respective remaining assets.

The plan was dated 8/31/11. Shortly thereafter, issues in Europe began ramping up. It would not surprise me to see a little latitude being given to complete a sale versus the start of a liquidation of the banks.

Liquidation of Aurora Bank FSB could also entail selling the bank in pieces.

You just described why it makes sense to me to take a position here. Going further, even if the Bank is sold and the Series D Prefs don't get taken out you still probably trade back near par or perhaps even above par in this rate environment, depending on the buyer, when the holdco is no longer a sub of an entity in Chapter 11 bankruptcy and divs get paid regularly without needing quarterly approval.

I was under the impression (perhaps incorrect), that both Aurora FSB and Woodlands had to be sold by May 2012 (with a report due to the OTS, now OCC, by the end of February 2012), as to progress on sale of banks, and if sale(s) could not be completed by May 2012 (or were not likely to be sold), that the banks would then begin to be liquidated.

Given Aurora's fortress balance sheet, it would appear that a liquidation would be fantastic news for the EOSPN Prf'd D shares, in that we would get taken out at par ($25/share), on a liquidation of the company.

Or, in the alternative, we should be on track to get regular dividends, not just the 4th Quarter BS. An 8.50% dividends is a great return (assuming that it were consistant), and it's actually greater than 8.50% right npw, given that it's trading below Par. The only way to get a better return would be using a gun.

Please correct me if I've got anything wrong - as I noted above, I could be way off on my understanding as to where things currently stand (near term), but this is how I understand things to be. Again, I could be way off.

TIA.

Liquidation is likely.

The current balance structure cannot generate income sufficient to cover the annual dividends.

There are other options. It could grow the loan portfolio.

Aurora FSB rolled out a jumbo product this week in its Correspondent channel. Yes, I said "jumbo". The program highlights include a 15- and 30-year terms with fixed rates and 5/1, 7/1, 10/1 Hybrid ARMS. The maximum loan amount is $2,000,000 for owner occupied 1-2 units. Loans at 80% LTV available at 700 Fico for a maximum of $1,000,000 loan amount. Cash-out loans allowed up to 60% LTV.

Since the GSE's will not buy non-conforming loans, Aurora will either have to hold them in its portfolio or find a buyer. I could envision the REIT buying the loans just like Thornburg Mortgage once did.